Uber plans major NC expansion, but how good are the jobs?

Uber driver Karim Amrani sits in his car parked near the San Francisco International Airport parking area in San Francisco, July 15, 2015.
Jeff Chiu
AP

Uber driver Karim Amrani sits in his car parked near the San Francisco International Airport parking area in San Francisco, July 15, 2015.
Jeff Chiu
AP

Ride-hailing service Uber wants to flood North Carolina with 5,000 new drivers to go with the 8,000 the company already has operating in the state.

The company plans to hire those drivers by partnering with social service organizations in Charlotte and elsewhere – organizations that will help connect Uber with people who need work. Charlotte is among the 15 cities chosen for Uber’s Urban Partnership (UberUP), part of a plan to add 50,000 drivers along the East Coast.

Uber’s expansion comes as North Carolina lawmakers are considering a bill that would regulate Uber, and similar services like Lyft and Sidecar, as separate from taxis – preventing cities and towns from imposing stricter regulations. Supporters say the measure would encourage job growth and economic development.

But how good are those jobs?

Digital Access for only $0.99

San Francisco-based Uber touts the initiative into inner cities as an opportunity for individuals seeking entrepreneurial opportunities they wouldn’t otherwise get. Company spokesperson Taylor Bennett said the company sees its drivers benefiting most from the flexibility Uber provides: “It’s that flexibility to be your own boss and set your own schedule.”

That flexibility appeals to leaders of social service organizations in Charlotte. But those leaders, and economists, also have questions. They wonder about the wisdom of driving for Uber as a full-time job.

Patrick Graham, CEO of Urban League of the Central Carolinas, said he first spoke with Uber executives about the idea in March, and he thinks the initiative will provide a good supplemental income opportunity for people who want the opportunity.

But he’s not sure the jobs will be a long-term solution for many.

“The jury is still out on the true economic impact it will have for individuals,” Graham said. He said it’s unlikely that someone could make a living at it full time in a suburbanized city like Charlotte, noting its differences from San Francisco and New York, where fewer people have cars.

Carol Hardison of Crisis Assistance Ministry looks at UberUP with hope. The nonprofit hasn’t partnered with Uber yet and is waiting to hear more about the initiative.

Many of the people who seek the nonprofit’s services are what Hardison describes as “by desire” employees – people with part-time jobs that don’t give them consistent hours week to week.

That unpredictability is hard for people to deal with and leaves gaps in their incomes, Hardison said. That’s where Uber can fill a void because its “driver-partners” set their own hours, she said.

The company even has a way of employing people without cars: its “Vehicle Solutions” program, which matches people who want to drive for Uber with car dealers and financing if they meet limited financial criteria. Uber says all of its partners are eligible for its program.

Other organizations in Charlotte, such as Charlotte Bridge Home – a nonprofit that helps veterans reintegrate into the community – didn’t see partnering with Uber.

Tiann Shade, employment and education specialist with Charlotte Bridge Home, said Charlotte Bridge Home declined to work with the ride-hailing company because “it wasn’t the right fit for the veterans we had at the time.”

Shade said the veterans the nonprofit works with are looking for full-time jobs that have stable hours and benefits in fields aligned with what they did in the military.

How much do they really make?

In January, Uber released data on driver satisfaction and earnings compared with taxi cabs in five major U.S. cities. The data showed that Uber drivers make $6 more per hour than taxi drivers. However, the company’s data was criticized because the hourly rate the company showed didn’t take into account gas, insurance or taxes compared with the taxi data, which did.

Uber declined to release a Charlotte-area statistic, but Bennett highlighted a press release that said North Carolina Uber driver partners have made more than $20 million, on more than 2 million trips over the past 19 months. That $20 million is before taxes, gas and insurance costs – and after Uber’s 20 percent cut on every ride.

That figure is spread over more than 8,000 drivers who have worked for Uber in North Carolina.

One of those drivers, Rizwan Akhtar, sits behind the wheel of his white Toyota Camry for 10 hours every day, his living determined by the buzz of an iPhone.

He starts driving for Uber at 4:30 p.m. and stops the next morning. Six or seven days a week, his first stop after leaving home in Mount Holly is Charlotte Douglas International Airport. Uptown comes next. He has made $450 to $600 each week for the past six months. Most of the time, it’s closer to $450.

He worries about Uber hiring more drivers. Akhtar said Uber is a great company to work for, and when there’s a lot of rider demand, he makes money. But more drivers would cut into his monthly earnings unless Uber raises the minimum price of the ride.

Akhtar’s concerns are echoed by economists, who see Uber’s independent contractor model as a risk for employees.

Jeffrey Pfeffer of Stanford University said studies the company has published about driver satisfaction and earnings are flawed because they only take into account current drivers. He said UberUP is probably a good thing for Uber, but probably not so much for drivers.

“Uber’s goal is to have as many drivers as possible,” Pfeffer said, adding that a larger workforce would likely hurt the earnings of current drivers.

“You’re taking the same number of passengers and dividing them among a very vast increase in the number of drivers,” he said, adding that workers aren’t going to make enough to support themselves full time. “How many hours are you actually earning income because of this increased supply of people picking people up?”

Consumer demand drives jobs

James Parrott of the Fiscal Policy Institute in New York echoed Pfeffer’s comments and said the flexibility of being an independent contractor is inaccurate: “That doesn’t make a work life of such a worker more flexible; it leaves them with inadequate pay and benefits and struggling to get by.”

Uber’s Bennett, however, says the company’s jobs are a product of more consumer demand.

“As we continue to grow, we see new demographics finding value in safe, convenient transportation options and starting to use Uber as a new way to get around town,” he said. “The more rider demand increases, the greater the need for more driver partners to meet that growing demand and maintain Uber’s high level of reliable service.”